MacAulay-Brown acquired national security products and engineering services provider Commonwealth Technology in late January in a deal that KippsDeSanto & Co. says could represent a trend in the government contracting market.
Alexandria, Va.-based CTI provides the national security community with hardware offerings and software services in areas that include reverse engineering, business data management, cybersecurity, molding and fabrication, communications and antenna design and sensor and surveillance integration.
Kipps says that a company such as CTI is in high demand because it meets certain criteria that GovCon firms are looking for in an M&A partner.
That criteria includes differentiated offerings in “mission-critical” markets, trusted customer relationships within the intelligence community, prime positions on large contract vehicles and thought leadership matched with technology development and production.
KippsDeSanto recently acted as an adviser on the Secure Communication Systems and Tactical Micro deal, M&A activity that met some of the same criteria as the CTI deal.
Kevin DeSanto, managing director at KippsDeSanto, said M&A deals in GovCon, which were mostly absent in 2013, are due to ramp up again.
He said that because the federal government was able to agree on a two year budget agreement, larger companies are more stable and can stop focusing internally and look for M&A partners.
Karl Schmidt, managing director at KippsDeSanto, told GovCon Wire that the amount of M&A activity in the pipeline at the investment banking firm is evidence of this new flurry of activity.